The world is a strange place right now. Things that we worried about only a couple of weeks ago now seem trivial.
In the current climate, cashflow is more of an issue than ever for small business owners. Many small businesses are benefiting from the advancement of Fintech (financial technology), using clever tools to help them keep control of their cashflow.
Put simply cashflow is cash in and cash out and getting paid on time is essential to maintaining a healthy cashflow. Here are 5 top tips to improve your collection period while maintaining good customer relationships.
Invoice on time
It sounds crazy but many small business owners are too busy working to send out invoices. If this is your problem, having good cloud-based accounting software will help. The accounting software supported by us enables you to access your accounts on a mobile app. You can therefore raise an invoice on the go and email the invoice straight to your customer.
If you have customers who are invoiced a set amount on a regular basis, repeating invoices can be set up. This means the invoice will be generated and emailed to your customer without you having to even think about it.
Make the most of ‘due dates’
Cloud-based accounting software will prompt you to enter a due date when raising a sales invoice. By ensuring these are input correctly and in line with the credit terms agreed, your software will let you know when debts are overdue.
Keep real time information
A cloud-based accounting system will link directly to your bank. This allows customer receipts to be allocated instantly and you will be able to view who owes you money at any point in time.
Remind your customer they owe you
It can be awkward chasing customers for money. Why not automate the process? Statements can be automatically sent out on a regular basis and payment reminders can also be sent automatically from your software.
Accounts software like XERO will automatically update your contacts information when an invoice, statement or payment reminder is sent. Cloud based software will, to varying degrees, also allow you to make notes on your contacts re communications you may have had with them.
These tips will hopefully make you aware of how cloud-based accounting software can help reduce your collection period. If you feel a more advanced credit control facility is required, you may want to look at some of the apps available on the marketplace. Most will link in and work with your accounting software but will offer a more detailed and personalised credit control function.
Here are some of our favourites –
||Not only does this provide credit control function but offers a three-month cashflow forecast.
You can personalise automated invoice reminders and it will even send out ‘Thank you for paying’ emails
||Allows you to automate all aspects of credit control while keeping it personal.
Different schedules can be made for different customers, like good and bad payers.
||As well as automating the credit control, Satago has ‘Risk Insights’ – a powerful tool that allows you to assess the risk of providing credit to each individual customer.
Satago also has a ‘pay as you go’ invoice finance facility for those times when cashflow is tight.
||Along with automating the credit control function, Debtor Daddy takes it that one step further with professionals available to call customers on your behalf.
They will also escalate the debt to a professional debt collecting agency when necessary. If your needs are complex, this may be the app for you.
If you have any questions on the above, please contact your relationship manager or via email.
In next months Fintech Friday, we turn our attention to purchase ledger and how the latest apps can help you.